KSBI KS Bancorp Inc (PK)

KS Bancorp, Inc. (the �Company�) (OTCBB: KSBI), parent company of KS Bank, Inc., today announced unaudited second quarter financial results for the 2008 fiscal year. Consolidated earnings for the second quarter of 2008 were $399,000, or $0.30 per diluted share, compared to earnings of $238,000, or $0.18 per diluted share, for the same period in 2007. In 2007, the Company repositioned its investment portfolio which attributed to pre-tax losses of $525,000 on the sale of investment securities. Excluding the losses we recorded to restructure our investment portfolio, consolidated earnings for the second quarter of 2007 would have otherwise totaled $540,000, or $0.41 per diluted share (a non-GAAP measure). For the six months ended June 30, 2008, consolidated net income was $773,000, or $.59 per diluted share, compared to $668,000, or $.51 per diluted share, for the six months ended June 30, 2007. The Company�s consolidated total assets have increased to $318.6 million during the six months ended June 31, 2008, as compared to $318.3 million at December 31, 2007. The net loan portfolio as of June 30, 2008 has remained constant at $240.0 million since December 31, 2008. Total deposits have increased to $234.8 million at June 31, 2008 compared to $233.5 million at December 31, 2007. Commenting on the second quarter 2008 results, Harold Keen, President and CEO, stated, �The significant interest rate decreases by the Federal Reserve created a very challenging environment for KS Bancorp. While the second quarter results are not at the level we projected prior to the Federal Reserve rate decreases, they are sufficient to allow us to continue to pay an aggressive dividend and to continue the growth of KS Bancorp.� In addition to the earnings report issued today, KS Bancorp, Inc. announced the payment of a quarterly cash dividend of $0.13 per share for stockholders of record on July 29, 2008, with payment to be made on August 13, 2008. KS Bancorp, Inc. is a Smithfield, North Carolina-based single bank holding company. KS Bank, Inc., (the �Bank�) a state-chartered savings bank, is KS Bancorp�s sole subsidiary. The Bank is a full service community bank offering traditional banking products and services through its operation of eight full service branches located in Kenly, Selma, Clayton, Garner, Goldsboro, Wilson, Wendell, and Smithfield, North Carolina. This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like �expect,� �anticipate,� �estimate� and �believe,� variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements. KS Bancorp, Inc. and Subsidiary Consolidated Statements of Financial Condition � � � June 30, 2008 December 31, (unaudited) 2007(a) � (Dollars in thousands) ASSETS � Cash and due from banks: Interest-earning $ 1,634 $ 6,298 Noninterest-earning 4,377 1,482 Time Deposit 100 100 Investment securities available for sale, at fair value 53,775 53,624 Federal Home Loan Bank stock, at cost 2,949 2,914 Presold mortgages in process of settlement - 476 � Loans 242,666 242,535 Less Allowance for loan losses � (2,684 ) � (2,702 ) Net loans 239,982 239,833 � Accrued interest receivable 1,766 1,952 Foreclosed assets, net 1,496 123 Property and equipment, net 9,469 8,958 Other assets � 3,033 � � 2,509 � � Total assets $ 318,581 � $ 318,269 � � LIABILITIES AND STOCKHOLDERS' EQUITY � Liabilities Deposits $ 234,861 $ 233,480 Short-term borrowings 4,481 10,596 Long-term borrowings 59,048 54,048 Accrued interest payable 541 639 Accounts payable and accrued expenses � 1,135 � � 821 � � Total liabilities � 300,066 � � 299,584 � � Stockholder's Equity: Preferred stock, no par value, 5,000,000 shares authorized; no shares issued and outstanding $ - $ - Common stock, no par value, authorized 20,000,000 shares; 1,309,501 shares issued and outstanding in 2008 and 2007 1,607 1,607 Retained earnings, substantially restricted 17,568 17,135 Accumulated other comprehensive loss � (660 ) � (57 ) � Total stockholders' equity � 18,515 � � 18,685 � � Total liabilities and stockholders' equity $ 318,581 � $ 318,269 � � (a) Derived from audited financial statements KS Bancorp, Inc and Subsidiary Consolidated Statements of Income (Unaudited) � � � � � Three Months Ended Six Months Ended June 30, June 30, 2008 2007 2008 2007 (In thousands, except per share data) � Interest and dividend income: Loans $ 4,205 $ 4,688 $ 8,747 $ 9,169 Investment securties Taxable 301 264 610 532 Tax-exempt 345 318 683 603 Dividends 43 41 88 79 Interest-bearing deposits � 8 � 42 � � 34 � 74 � Total interest and dividend income � 4,902 � 5,353 � � 10,162 � 10,457 � � Interest expense: Deposits 1,879 2,169 4,073 4,276 Borrowings � 588 � 713 � � 1,271 � 1,366 � Total interest expense � 2,467 � 2,882 � � 5,344 � 5,642 � � Net interest income 2,435 2,471 4,818 4,815 � Provision for loan losses � 18 � 20 � � 53 � 153 � � Net interest income after provision for loan losses � 2,417 � 2,451 � � 4,765 � 4,662 � � Noninterest income: Service charges on deposit accounts 350 327 679 616 Fees from presold mortgages 88 119 179 207 Gain (Loss) on sale of investments 13 (561 ) 13 (525 ) Other income � 43 � 66 � � 81 � 109 � Total noninterest income � 494 � (49 ) � 952 � 407 � � Noninterest expenses: Compensation and benefits 1,526 1,328 3,021 2,645 Occupancy and equipment 241 238 483 471 Data processing & outside service fees 177 191 387 391 Advertising 39 65 92 117 Net foreclosed real estate 31 - 54 19 Other � 412 � 338 � � 745 � 615 � Total noninterest expenses � 2,426 � 2,160 � � 4,782 � 4,258 � � Income before income taxes 485 242 935 811 � Income tax expense � 86 � 4 � � 162 � 143 � � Net income $ 399 $ 238 � $ 773 $ 668 � � Basic and Diluted earnings per share $ 0.30 $ 0.18 � $ 0.59 $ 0.51 � � Dividends per common share $ 0.13 $ 0.13 � $ 0.26 $ 0.26 �